NEWS – THURSDAY 18TH MARCH 2021

NEWS ROUNDUP

TAX NEWS – THURSDAY 18TH MARCH 2021

What to expect from tax day

With the Treasury set to detail consultations on future tax policies on March 23, the Telegraph’s Harry Brennan looks at what the event that has been dubbed “tax day” may bring. He notes that officials have said the proposals usually set out in the Budget have come later this year to allow for greater scrutiny. While much of the focus is expected to be on technical administration of the tax system, Mr Brennan says the Chancellor may also “lay the groundwork” for possible tax changes that could come after April 2022. Nimesh Shah of Blick Rothernberg is preparing for “significant” announcements that were delayed because of the latest coronavirus lockdown, saying he expects tax day to “give a real insight into Rishi Sunak’s intentions.” On the changes Mr Sunak could outline, Mr Brennan says reform of the capital gains tax system is possible, while Richard Wild of the Chartered Institute of Taxation says he expects to see changes to Business Assets Disposal Relief which discounts CGT for people selling shares in their own firms. With it suggested that the lower rates of National Insurance paid by the self-employed could be reviewed, BDO’s Paul Falvey said it is likely the Government will look to more closely align the tax treatment of the self-employed and employees in the coming years. Mr Brennan also says changes to property tax may be on the cards, with business rates potentially in line to be reformed or replaced.

The Daily Telegraph

Taxing questions for retirement

Faith Glasgow considers what freezes on certain taxes mean for investors and pension savers. She notes that March 23 is set to see changes to tax administration announced but not broad tax policy changes.

Financial Times

EMPLOYMENT NEWS – THURSDAY 18TH MARCH 2021

Firms miss target for women in senior roles amid pandemic

The fourth annual review from think-tank New Financial says the Women in Finance Charter faced its biggest test yet after the coronavirus pandemic struck in 2020. Over 70% of the 209 signatories, including the Treasury, have met their self-imposed targets, or were on track to meet future targets. The review shows that 35% of signatories have met their target and 36% are on track to meet the future deadlines they have set themselves. Just over 60% of the signatories have set a target of at least 33% of female representation in senior management. According to the review, a group of 81 firms were due to hit their target by the end of 2020, but 44 of them failed to do so, citing deliberately ambitious targets, as well as recruitment or promotion freezes due to the pandemic. Among those who missed the target were the Financial Conduct Authority, which set itself a target of 45%; the Financial Reporting Council, which set a goal o f 33%; and the Bank of England, which had aimed for 35%.

The Times Daily Mail City AM

FCA eyes diversity mandates for boards

The largest listed companies in London may have to appoint a minimum number of diverse board members or face regulatory scrutiny under measures being weighed by the Financial Conduct Authority (FCA). The City watchdog will consider whether diversity of management teams at the firms it regulates should form part of its senior managers regime. Noting that listing rules for New York’s Nasdaq require all companies to have at least two “diverse” directors – or explain why they do not, FCA chief executive Nikhil Rathi said: “As part of our regulatory work on diversity and inclusion and the listings framework, we will be exploring whether we should make similar requirements part of our premium listing rules”.

Daily Mail Financial Times

PROPERTY NEWS – THURSDAY 18TH MARCH 2021

UK 12th on house price increase index

The UK has placed 12th in estate agent Knight Frank’s global index of house price increases, with the average value of UK homes climbing 8.5% in 2020. Turkey topped the rankings, having seen property prices surge by almost a third last year. It saw a consistent increase in values in 2020, leading the index for four consecutive quarters. It was followed by New Zealand, where prices went up by nearly 19% last year, and Slovakia, where values climbed 16%. The UK’s 8.5% price growth saw it outdo several European neighbours, including Germany (7.8%), France (6.4%) and Ireland (2.2%). Spain was among the worst-performing countries, with typical prices down 1.8%. Of the six countries in the index which saw house prices decline, India saw the steepest fall at 3.6%. Overall, prices across the globe increased 5.6% on average in 2020, up from 5.3% in 2019.

Daily Mail

CORPORATE NEWS – THURSDAY 18TH MARCH 2021

Designer close to collapse

Fashion brand Ralph & Russo is on the brink of collapse and is said to have lined up Begbies Traynor and Quantuma to oversee a possible administration.

The Daily Telegraph, Business, Page: 2 Financial Times, Page: 12 City AM

ECONOMY NEWS – THURSDAY 18TH MARCH 2021

Experts urge BoE not to shift policy

A panel of leading economists have voiced a belief that the Bank of England (BoE) should leave policy unchanged when it announces its latest monetary policy decisions today. All nine members of the Times’ shadow monetary policy committee – a panel of former central bankers and economists – recommended the Bank holds off taking any action until a clearer picture of the economic climate emerges. Analysts expect the Bank to hold interest rates at 0.1% and leave quantitative easing at £895bn. Reflecting on BoE chief economist Andy Haldane’s suggestion that the economy is a “coiled spring”, Sir John Gieve, a former deputy governor at the Bank, said that “inflation may be about to wake up”. Bronwyn Curtis, non-executive director at the Office for Budget Responsibility, adds: “Any coiled spring recovery will be temporary”, while Sir Steve Robson, a former Treasury mandarin, said he was “not entirely convinced” by the coiled spring, suggesting that the unpredictability of COVID-19 “may lead a lot of people to be quite cautious”.

The Times

Vaccine key to unlocking consumer spending

Research by EY points to “significant pent-up demand for consumer spending post-pandemic”. However, with 55% of people polled as part of EY’s future consumer index saying COVID-19 will only stop affecting their lives after most people are vaccinated, the firm said it suggests “the big unlock in consumer behaviour will come later in the summer rather than when non-essential stores open on April 12.”

The Times, Page: 2

INDUSTRY NEWS – THURSDAY 18TH MARCH 2021

Government consultation outlines audit shake-up

The Government has said the Financial Reporting Council should be replaced by the Audit, Reporting and Governance Authority (ARGA), with the new regulator to be given legal powers to improve the quality and standards of the auditing profession. Officials have launched a consultation that will deliver rules designed to help avoid company collapses and ensure auditors uncover problems sooner. The proposals include plans to break up the dominance of the Big Four to avoid conflicts of interest. This could see large businesses required to use smaller auditor firms to conduct part of their annual audit. Large companies will also face greater scrutiny from regulators, with tougher penalties for individual company directors where serious failings occur, with it to be made easier to claw back bonuses paid to executives of failed companies. The consultation accepts the vast majority of recommendations made by reviews into auditing and corporate reporting by Sir Donald Brydon, Sir John Kingman and the Competition and Markets Authority. Business Secretary Kwasi Kwarteng said a series of high-profile corporate collapses show that “Britain’s audit regime needs to be modernised with a package of sensible, proportionate reforms.” Shadow Business Secretary Ed Miliband welcomed some of the measures but suggested there are “real questions about whether this package is sufficient to reform the broken audit market”. He said it is “regrettable” that the package “waters down” some of the independent recommendations made in regard to competition in the sector, including on mandatory joint audits between the Big Four and challenger firms. Welcoming the reform, the ICAEW said the establishment of ARGA should be the top priority, with chief executive Michael Izza adding that he would like to see “the reform agenda taken forward with some pace”.

The Guardian, Page: 34 The Times, Page: 35 The Times, Page: 36 Daily Mail, Page: 31 Financial Times, Page: 2 The Daily Telegraph, Business, Page: 1 The I, Page: 45 Daily Mirror, Page: 48 City AM BBC News Sky News

Opinion: Kwarteng ‘trying to do too much’

Alistair Osborne in the Times weighs Kwasi Kwarteng’s audit shake-up, saying that the proposals “are a bit of a smorgasbord” and voicing concern that the Business Secretary is “trying to do too much”, warning that “rule changes, like accounts, should not be overly complicated.” He says a plan to force big companies to use a challenger firm to conduct a meaningful portion of their annual audit looks unworkable, while reporting obligations on both auditors and directors “look like being a bureaucratic minefield”. However, Mr Osborne says replacing the Financial Reporting Council with the Audit, Reporting and Governance Authority is a “no-brainer”, adding that giving the watchdog the clout to force an operational split between audit and non-audit functions of accountancy firms in a bid to cut conflicts of interest is “overdue”.

The Times, Page: 37

Long road to audit reform leaves path littered with questions

Helen Thomas says proposed audit reforms do not address how 97% of FTSE 350 audits are undertaken by the Big Four, with officials opting against mandating joint audits.

OTHER NEWS – THURSDAY 18TH MARCH 2021

Deloitte eyes AI to spot crime

Deloitte is to use artificial intelligence systems to help clients detect financial crime. It will utilise systems developed by Quantexa which scan company data for signs of financial crime disguised by payment flows. Deloitte’s Andrew Oates said: “Our economic crime expertise, combined with Quantexa’s analytics, will enable clients to identify trends, monitor known risks and detect new threats more effectively.”

Daily Express, Page: 49

Financial Times, Page: 12

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Paul Southward